(a) Before an unauthorized insurer files or causes to be filed any pleading in any court action, suit, or proceeding or any notice, order, pleading, or process in an administrative proceeding before the director or his designee instituted against the person or insurer, the insurer shall either:
(1) Deposit with the clerk of court in which the action, suit, or proceeding is pending, or with the director or his designee in administrative proceedings before the director or his designee, cash or securities, or file with the clerk of court or the director or his designee a bond with good and sufficient sureties, to be approved by the clerk or director or his designee, in an amount to be fixed by the court or director or his designee sufficient to secure the payment of any final judgment which may be rendered in the action or administrative proceeding.
(2) Procure a certificate of authority to transact the business of insurance in this State. In considering the application of an insurer for a certificate of authority, for the purposes of this paragraph, the director or his designee need not assert the provisions of Section 38-7-90 against the insurer with respect to its application if he determines that the insurer would otherwise comply with the requirements for a certificate of authority.
(b) The director or his designee, in an administrative proceeding in which service is made as provided in Section 38-25-510, may in his discretion order a postponement as may be necessary to afford the defendant reasonable opportunity to comply with subsection (a) and to defend the action.
(c) This section does not apply to an eligible surplus lines insurer which maintains the deposit required by Section 38-9-80 or which has on file with the department a surety bond issued by an admitted insurer in an amount determined by the director or his designee to be sufficient to meet the security requirements of Section 38-9-80. Before an eligible surplus lines insurer files or causes to be filed any action, suit, or proceeding in this State to enforce a right, claim, or demand arising out of the transaction of insurance, it shall produce evidence that the security deposit is presently on file or that the required surety bond is then in force and effect.
HISTORY: Former 1976 Act Section 38-52-70 [1947 (45) 322; 1952 Code Section 37-268; 1962 Code Section 37-268; 1978 Act No. 457 Section 1] Section 38-53-60 [1975 (59) 127] recodified as Section 38-25-550 by 1987 Act No. 155, Section 1; 1988 Act No. 314, Section 4; 1993 Act No. 181, Section 606.